Canada’s jobs market showed very tough in the last month, with the % dropping to a record low, wage gains accelerating and enormous numbers of Canadians dropping out of the labor force.
The economy came down to 43,200 jobs in June, Statistics Canada reported, the numbers are surprisingly showing negative reading compared to the 22,500 gain expected by economists. But the drop appears to reflect the voluntary exit of workers from the labor pool , which dropped by nearly 100,000 in June — the most important one-month decline on record outside of the pandemic.
The decline by the number of workers brought down the jobless rate to 4.9%, a low in data going back to 1976.
According to a related survey, the ratio of unemployed people to job vacancies reached an rock bottom of 1.2 in March, highlighting labor supply pressures facing employers seeking to draw in and retain employees.
In the meanwhile, employment rose by 40,000, or 0.2 %, driven by gains in full-time work among young and core-aged women, the agency said.
Total hours worked were little changed in May, but were up 5.1% compared with 12 months earlier and average hourly wages increased 3.9% to 31.12 Canadian dollars ($24.9) on a year-over-year basis, according to Statistics Canada.
The numbers shows the extent to which the nation’s market has run up against maximum employment, and can struggle to grow further without continuing to improve wage gains. The variance between demand and supply of jobs is a primary reason why the Bank of Canada is tightening monetary policy so aggressively.
The tough labor market in recent months has contributed to year-over-year decline in unemployment rates across the core-aged population, the national statistical agency added.
The adjusted numbers, which integrate those who are in need of a job but didn’t find one, fell 0.2 decimal point to 7 percent in May, rock bottom rate on record since comparable data became available in 1976.
